Thursday, October 8, 2009

So The Options Are? (Not Many)

SPX 60m 9mo chart -

A) To please both the bulls and some of the bears - The red dashed line - could SPX be in a big bull channel? This option seems valid with two touches on both upper and lower parallel trendlines. On the weekly chart (see below) there is a little room left in the indicators for room to run so maybe end of Q1 is max upside with this scenario. (This is the prime case for a double top or new high in the 1Q of next year)

B) To further entice the bulls (only temporarily) - the pink lower tendline - Has the lower trendline been reset or was it a slight throw under? I have begged for this for months (see my original call below). The A-E rising wedge is in the E leg and running on fumes but some precious upside is still possible.

C) We have had a break of the P2 bear market lower trendline and a completed back test and the fall can commence.

D) They just continue to manipulate the hell out of the dollar and stock prices and none of this matters and we should just be good little boys and girls and buy, buy, buy like our capitalist pig overseers mandate us to.

Foregoing option D (we'll call that the "standard operating procedure"), I prefer C then B (and A is a possibility for the first leg of the fall scenario). I have called for a truncated (petering out) 5th wave (last run up) and that is where I think we are. This is the last leg up. I just can't see any other options technically that can bring more upside at this point. The only way for them to geet this puppy any higher is to have a fall to the 1000 to 950 range that resets the lower wedge line (here is my original call from June of this year).

Note the VIX's three false breakouts.

So at this moment, I have us in the final leg up. There are some connecting trendlines I'll show in the am post tomorrow on the /ES that may be the point of inflection near a 1075 double top that may just do the market in. I will be one trading day from my 10/12 top call.

SPX weekly Indicator chart - This is the chart that has kept me from being a false top calling prophet. The yellow boxes on the indicators show the room left for these indicators to run. Yes, it exists, still. I have begged and begged for RSI to set a divergence and we may just get a small one with this last pop up here. Other divergences already exist.

My SPX Daily Indicator chart does the best job of showing how this run is petering out and just how little room is left to run. The divergences on the indicators, their extreme levels and their relation to the supporting tendlines is screaming this is the blow off sucker punch.

I hope this helps (and I hope I am right).

I'll add this - IF the magic of TA works, there may be an enormous event this weekend or within a week or two that changes everything. I have been calling for an "external" event to rip the market away and TA has an uncanny ability of timing things. We'll see.

GL Trading.

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